Court ruling endangers hundreds of NLRB decisions

Feb. 5, 2013 - 04:45PM
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Numerous decisions by the National Labor Relations Board could be on shaky ground following a federal appellate court ruling that three board members had been appointed illegally.

President Obama’s appointment of the trio to the board in early January 2012, during a Senate recess and without Senate confirmation, was unconstitutional, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit said in a Jan. 25 ruling.

The ruling came in response to a lawsuit brought by Noel Canning, a Washington state canning and bottling company that challenged an NLRB decision in a labor dispute. Because the appointments were invalid, the five-seat board lacked a quorum and “its order is void,” the court said.

The ruling came under immediate fire from the White House, which is expected either to ask the full circuit court to rehear the case or to appeal directly to the Supreme Court.

In a statement, NLRB Chairman Mark Pearce said the board “respectfully” disagreed with the decision and believed that Obama’s position would prevail. Last month’s ruling applies to only the Noel Canning case, Pearce said, while more than a dozen others raising similar questions are pending in other appellate courts. In the meantime, the board “will continue to perform our statutory duties and issue decisions,” Pearce said.

Since the beginning of last year, the board has probably issued more than 500 decisions, said Linda Doyle, a Chicago attorney with the firm McDermott, Will & Emery who represents employers in labor contract negotiations.

While Doyle expects “a lot of litigation” from employer groups in the wake of the appellate court’s ruling, she thinks it would come in the form of carefully chosen challenges to individual orders rather than an attempt to throw out every board decision and rule-making from the last 13 months.

Assuming that the case does go to the Supreme Court, she added, a final decision could be two years off.

Ronald Meisburg, a former NLRB general counsel now with the Proskauer Rose firm, said he doubts that businesses would bother to challenge previous board actions — such as decisions in unfair labor practice cases — that are now closed. But companies already appealing board decisions could now cite the recess appointment issue if they haven’t already, he said.

Recess appointments can last at most until the end of the next year. Presidents have relied on them to install nominees for executive branch positions who would have trouble winning Senate confirmation. In the Noel Canning case, the court disagreed with the Obama administration’s contention that the Senate was in recess in early 2012, even though Republicans were holding brief “pro forma” sessions every three days. The court also ruled that the White House can make recess appointments only when the vacancy occurs during a Senate recess.

The same day that Obama seated the three NLRB members, he also used a recess appointment to put former Ohio Attorney General Richard Cordray in charge of the Consumer Financial Protection Bureau. Last week, Sen. Mike Johanns, R-Neb., and two other Republican lawmakers introduced a bill that would bar both agencies from enforcing any decisions without a Senate-confirmed board or director.

Both agencies have been “operating under a ruse for more than a year,” Johanns said in a news release. “This legislation forces them to stop functioning as if they legitimately hold office and recognizes the reality that the president overstepped his constitutional authority.”